An unexpected improvement. After a decline of 0.2% in the first trimesterFrance returned to growth from April to June, recording a more dynamic rebound than expected in its GDP, which rose by 0.5% in the second quarter, according to a first estimate published Friday July 29 by the National Institute of Statistics and Economic Studies (Insee).
The good performance of the French economy in the second quarter can be explained both by the clearly positive contribution of foreign trade to growth and the less marked drop in household consumption than in the first quarter.
This estimate exceeds expectations, INSEE having foreseen growth of +0.25% and the Banque de France, growth of 0.2%.
According to this first estimate of the national accounts, which will have to be confirmed at the end of August by INSEE, imports fell by 0.6% in the second quarter, while exports jumped by 0.8%.
These latter have been “driven in particular by transport services (+6.3%, following +5.0% in the first quarter) and spending by foreign travelers in France (+8.6%, following +5.0%)”details INSEE. “Conversely, exports of goods fell back (− 0.6%, following + 1.4%), particularly in transport equipment and agri-food”explains the institute.
Household consumption is contracting once more
As for consumption, the traditional driver of the French economy, it remains negative for purchases of goods (−1.3%), but purchases of services are on the rise once more (+1.5%). Two contradictory trends leading to an overall decline of 0.2% in household consumption in the second quarter.
With the figures published on Friday, INSEE estimates the growth overhang of the French economy at 2.5% for the year 2022.
This figure is in line with the government’s annual growth forecast, and slightly higher than the expectations of the Banque de France or the IMF (+2.3%). INSEE data are published the day following the publication US growth figures in the second quarter (− 0.9% at an annualized rate, following − 1.6% in the first quarter), which technically pushed the country into recession.
In Europe, growth estimates for the euro zone and several large countries of the Old Continent are also due to be released on Friday morning.
